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Sandvik released a fairly solid set of numbers.
The impact of acquisitions is relatively significant, as expected.
SMT, to be distributed to shareholders, is now reported as discontinued operations.
The short to mid-term macro outlook is getting more cloudy.
We will fine-tune our numbers (exact impact of M&A and lower short-term organic growth).
Companies: Sandvik (SAND:STO)Sandvik AB (SAND:OME)
The group released FY21 results which came out in line with forecasts
The Mining and the Metals divisions will benefit from a rather strong order-intake
Net debt is still low despite acquisitions
The group looks set to reach its mid-term targets
We will upgrade our forecasts and valuation after this release
The Q3 21 numbers came in slightly above expectations
The order-book rose markedly while logistics issues weighed on revenue growth
Margins proved rather resilient, even if a tick lower than in H1
Even if the group does not issue any guidance, we are reasonably comfortable for Q4
The performance in H1 21 came out in line with expectations
The Q2 21 numbers were very similar to Q1’s at the top line and profit levels
The group still mentions some potential bottlenecks in its operations
We will not change our numbers much after this release
Q1 21 numbers came in line with expectations
Margins are on the rise, after the weaker FY20
SMT is still under pressure
Some bottlenecks may weigh on growth in the next quarters though
No big change to our numbers at first glance, but we remain cautious on organic growth going into Q2/Q3
FY20 results were more or less in line with consensus*
The Machining Solutions and Material Technology segments are still under pressure
The Mining business is doing well, particularly in terms of orders received
The balance sheet remains very healthy thus a SEK2.00 extraordinary dividend on top of the SEK4.50 ordinary one
We do not expect any major change to our forecasts
Companies: Sandvik AB
Q3 shows an (expected) rebound vs Q2
In particular, Mining&Rock Technology did quite well in the quarter
The other divisions are still suffering
The recent share price performance leaves little room for a significant upside
Q2 was tough and the outlook not very inspiring
The group’s exposure to Aeronautics and Automotive suggests there is still some way to go in terms of recovery
In this context, the strength of the balance sheet is a clear asset
We expect corporate action and asset rotation to continue to boost the group’s businesses
Q1 20 is of course down due to the COVID-19 crisis
Despite the lack of guidance, Q2 is set to be worse, notably in SMS
However, we like the margin resilience and ongoing cost-cutting programmes
The clean balance sheet is a clear asset in these troubled times
We will fine-tune our numbers, with little impact on the valuation in our view
FY19 numbers were broadly in line with our and the street’s expectations.
The long-cycle businesses have been doing well, while the short-cycle ones are still under pressure.
Visibility remains low for the latter, explaining our rather cautious top-line expectations going into FY20.
The separate listing of SMT will be another focus for investors in the current year (c.15% of total revenues).
Q3 19 numbers well in line with H1 19 numbers.
Some expected one-offs (efficiency measures), all booked in Q3.
The long-cycle business is going well, while the short-cycle one shows further weaknesses.
All in all, no major changes in our numbers to be expected.
Q2 results are very decent, and margins remain high
However, the order intake was a bit weak in the quarter, due to SMT and SMS
The balance sheet remains very clean, which is not a surprise
At the end of the day, the stock is likely to be capped before visibility improves on the macro front
- the Materials & Technology segment should be isolated
- the aim is to give it higher growth prospects
- a future listing is contemplated, albeit not guaranteed
- this could also open the door to a disposal speculation, we believe
- the impact remains small on the group’s scale
- Q1 19 in line with the (good) FY18
- The current year is unlikely to show such a high level of earnings growth.
- Acquisitions will continue, since this is both the group’s model and the sound balance sheet enables it.
- After the great outperformance since H2 18, we expect a more moderate one.
- We’ll revisit our forecasts/valuation, which are probaby slightly too low at the moment.
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Volex has issued its year end trading update confirming revenues in excess of $605m and an operating profit in excess of $55m that are ahead of consensus FY22E expectations of $581m and $54.2m respectively. The Group continues to trade strongly whilst effectively managing global supply chain challenges and benefits from its proven ability to pass through inflationary cost increases, albeit with a time lag. Demand increased during the year, in particular in the EV sector where sales almost double
Companies: Volex plc
Weekly round-up of AIM-listed healthcare news.
Venture Life Group, GENinCode, Kromek, Alliance Pharma, Polarean Imaging, Benchmark Holdings, Ondine Biomedical, Verici Dx, Faron Pharmaceuticals, Avacta Group, Abingdon Health, Open Orphan, Belluscura, Hutchmed (China), Oxford Biodynamics
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The award of £9.3m government funding towards the development of ITM’s 5MW Gigastack PEM electrolysers moves the company’s offer forward at a time when the market is being pushed forward by policy developments in the UK and in Europe.
Companies: ITM Power PLC
Companies: Ilika plc
Companies: Judges Scientific plc
National Grid confirmed its safe-haven status by unveiling a strong set of FY21/22 figures, c. 3.3% above the consensus. The group is moving forward serenely, benefiting from its natural inflation indexation both at operational and dividend levels.
The mid-term FY25/26 plan is backed even if the FY22/23 outlook expected at ‘broadly flat’ is admittedly a miss. But who cares? NG is the perfect benchmark for a flight-to-quality for investors awaiting better times.
Companies: National Grid plc
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*A corporate client of Hybridan LLP
Dish of the day
EnSilica (ENSI.L), has join AIM. EnSilica provides an end-to-end service for the design and supply of mixed signal ASICs, outsourcing certain elements such as the wafer fabrication of the manufacturing and packaging to third parties - otherwise known as a Fabless Semiconductor Model. ASICs are Integrated Circuits or semiconductor chips developed for a particular use or product rather than for general purpose usage. ASICs help
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Dish of the day
No Joiners Today.
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What’s cooking in the IPO kitchen?
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Renewi reported record results for the year to March 2022, stronger even than indicated in its March trading statement. Underlying EBIT increased 83% YoY to EUR133.6m with EPS up 118% to EUR0.98. The tone around expectations for forward recyclate prices was also firmed up, in our view, and Renewi has lifted its internal expectations for FY23. However, with investment expected to pick up sharply this year management chose not to reinstate the dividend. We increase our FY23 EPS forecast by 6% but
Companies: Renewi Plc
Today’s AGM statement indicates that trading in the first four months of the year has remained solid and the business is on course to achieve FY22 expectations. However, as indicated by other companies in the sector, headwinds persist, and the operating environment remains challenging. Reassuringly, the Company has confirmed that the developing situation within China has not impacted its manufacturing operations. The most salient issue remains input cost pressures and a price rise in both Contro
Companies: Strix Group PLC
2021 was a pivotal year for Getech, as the Company expanded its business model to accelerate the energy transition by using its world-class geoscience data, unique geospatial software and leading expertise to locate, develop and operate geoenergy and green hydrogen projects. This positions Getech ideally to support an anticipated global expansion in capital spending across the energy sector. Despite the uncertainties that existed throughout the year, FY21 revenue at £4.3m rose 20% YoY (in line w
Companies: GETECH Group plc
Last week's trading update revealed a number of challenges facing the group at present, led mainly by the fallout from the energy market crisis. We have updated our forecasts to reflect the new guidance and at the headline level this results in a 75% downgrade to FY22E EBITDA and a 52% cut to FY23E EBITDA. Whilst there remains ongoing volatility in the UK energy market, we believe we have been sufficiently prudent in setting our FY23 expectations. With a new management team now on board and mark
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The development of a technology and innovation centre facilitates further development of Powerhouse’s DMG technology at a time when the market for synthetic fuels is evolving and as new feedstock opportunities present themselves.
Companies: Powerhouse Energy Group PLC